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International Markets

(Cont. from page 04) a key hub for international companies and investors looking to build a presence in Africa.’

So far, Africa has been largely untouched by the international firms – though that might change as more infrastructure and construction projects get the green light, and further corporate and financial governance reforms attract more foreign investment. At present, however, the local legal scene in some African countries is beginning to develop as foreign clients seek local representation.

Elikem Kuenyehia, founder and managing partner of Oxford & Beaumont Solicitors based in Accra, Ghana, which specialises in corporate and commercial legal work, ­believes Ghana will see more local law firms develop in the next few years. ‘While there are no legal restrictions on large international firms setting up operations in Ghana, none have chosen to do so yet. This means that there are ­opportunities for locally based lawyers to build up their own ­commercial practices, particularly as there is growing demand from foreign companies to provide legal services. Presently, around 80% of our work comes from foreign clients who want advice on issues such as tax regulations to intellectual property rights.’

A burgeoning economy

Yet it is India – with its population of 1.2 billion, continual annual growth rate of 8%, and the belief that in 2020 it will become the world’s fourth largest economy – that international law firms are desperate to enter. And at the end of September India’s £2.6bn legal services market moved a step closer to full liberalisation when professional bodies agreed a ‘roadmap’ for reform. The UK’s justice secretary Kenneth Clarke, the Law Society and the Bar Council spent three days in Delhi speaking with Indian lawyers and Salman Khurshid, India’s law and justice minister.

In a statement the Law Society said professional legal bodies from both countries had agreed jointly to ‘thrash out a timetabled roadmap to pave the way for the legal sectors in both countries to benefit from greater access to India's legal services market’.

International firms have been urging India to open up its legal services market, but the country has remained fiercely resistant to the idea. In December 2009 a Mumbai High Court ruling confirmed that legal advice outside litigation practice is covered by the ban on foreign lawyers set down in the 1961 Advocates Act. Not that this has dissuaded all foreign firms from attempting to find legally compliant ways to enter the market. For example, a number of firms have set up alliance or ‘best friend’ offices in India over the last few years. In 2006 Linklaters formed a (Cont. on page 08)

India Changes to arbitration are an encouraging sign

While international law firms may be chomping at the bit to enter India, it is debatable whether they will be able to provide better litigation services for their clients – especially if they are seeking a judgment to be enforced in India.

Rohit Das, managing partner of Mumbai-based law firm PVX Law Partners, says that the market for litigation services in India is disorganised. ‘The vast majority of litigation in India is done by individual practitioners in the various courts and jurisdictions. A further significant barrier is that while the judiciary is professional and independent, delays are endemic, with timelines of 10 years or more in obtaining a final judgment not uncommon,’ says Das.

‘This leads to serious difficulties in enforcing contracts and transactions with India and most foreign parties prefering to opt for adjudication in an off-shore jurisdiction, wherever possible,’ he adds.

Arbitration in India also suffers from similar issues, says Das. The country is one of more than 140 nations adhering to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, the purpose of which is to ensure that awards rendered in one signatory country are enforceable in all of the others. 

However, although India’s Arbitration and Conciliation Act 1996 is based on the United Nations Commission on International Trade Law (UNCITRAL) Model Law, ‘arbitration in India and enforcement of awards can encounter a variety of frustrating obstacles in the Indian courts and, as a result, suffers from a number of shortcomings when compared with the standards generally accepted in international arbitration,’ says Das. 

But there have been some encouraging trends, Das says. For example, in 2009 the London Court of International Arbitration set up a subsidiary in India. The court has adopted new arbitration rules that are intended to adapt the general LCIA Arbitration Rules for Indian conditions and Indian case law. Another example is the Construction Industry Arbitration Council, which was set up by the Construction Industry Development Council in India in co-operation with the Singapore International Arbitration Centre. This is meant to provide an institutional mechanism for resolution of construction and infrastructure-related disputes.

‘The legal services market in India is improving and it will inevitably become liberalised, but it is more a political issue than a business concern and there is no definite timeframe to make any change,’ Das adds.